Consumer Perceptions of Price, Quality, and Value: A Means-End [PDF]

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Valarie A. Zeithaml

of Consumer Perceptions Price, A Means-End Value: Quality, and and Model Synthesis of Evidence Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions about the concepts and their relationships are presented, then supported with evidence from the literature. Discussion centers on directions for research and implications for managing price, quality, and value.

consumer perceptions of price, quality, THOUGH and value are considered pivotal determinants of shopping behavior and product choice (Bishop 1984; Doyle 1984; Jacoby and Olson 1985, Sawyer and Dickson 1984, Schlechter 1984), research on these concepts and their linkages has provided few conclusive findings. Research efforts have been criticized for inadequate definition and conceptualization (Monroe and Krishnan 1985; Zeithaml 1983), inconsistent measurement procedures (Monroe and Krishnan 1985), and methodological problems (Bowbrick 1982; Olson 1977; Peterson and Wilson 1985). One fundamental problem limiting work in the area involves the meaning of the concepts: quality and value are indistinct and elusive constructs that often are mistaken for imprecise adjectives like "goodness, or luxury, or shininess, or weight" (Crosby 1979). Quality and value are not well differentiated from each other and from similar constructs such as perceived worth and utility. is AssociateProfessor, A. Zeithaml Valarie FuquaSchoolof Business, thefinancial Theauthorgratefully DukeUniversity. supacknowledges Sciforthisresearch bythe Marketing provided portandcooperation thanks also The author andoneof itscorporate enceInstitute sponsors. C.Walker, Orville Lutz,C.WhanPark,DianeSchmalensee, Jr.,Richard forhelpfulcomJMreviewers andthreeanonymous A. Parasuraman, mentson draftsof the manuscript.

2 / Journalof Marketing,July 1988

Because definition is difficult, researchers often depend on unidimensional self-report measures to capture the concepts (Jacoby, Olson, and Haddock 1973; McConnell 1968; Shapiro 1973) and thus must assume shared meanings among consumers. What do consumers mean by quality and value? How are perceptions of quality and value formed? Are they similar across consumers and products? How do consumers relate quality, price, and value in their deliberations about products and services? This article is an attempt to provide answers to these questions by: * defining the concepts of price, quality, and value from the consumer's perspective, * relating the concepts in a model, and * developing propositions about the concepts, examining the available evidence in support of the propositions, and suggesting areas where research is needed. To accomplish these objectives, a review of previous research was augmented by an exploratory investigation of quality and value in the product category of beverages. Company interviews, a focus group interview, and 30 in-depth consumer interviews conducted by free-elicitation approaches generated qualitative data Journal of Marketing Vol. 52 (July 1988), 2-22.

that supplementedprevious researchand served as the basis for 14 propositions.

The Exploratory Study In the exploratory phase of the research, company, focus group, and in-depth consumer interviews were conducted to gain insight into consumer perceptions of quality and value. Cooperationwas obtained from a nationalcompanythat marketsthree distinctproduct lines of beverages:a line of 100% fruit-flavoredchildren's drinks, a line of 100% fruit juices, and a line of tomato-basedjuices. In-depthinterviews were held with the marketingresearchdirector, the senior product manager for juices, two company strategic planners, and the president of the company's advertising agency. Open-endedquestionspertainedto issues such as company knowledge about quality and value perceptions of consumers, ways the company determined those perceptions, and how quality and value were communicatedto consumers. A focus group interview on the topics of quality and value in beverageswas held in a metropolitanarea in the Southeast. The focus group was formed in accordance with guidelines traditionallyfollowed in the marketingresearch field (Bellenger, Bernhardt,and Goldstucker 1976). Participantswere recruitedto fit the demographicprofile of purchasersof fruit- and tomato-basedbeverages. All participantswere women between the ages of 25 and 49 and all had at least one child younger than 10 years of age. Participantswere screenedto ensurecurrentor recentusage of fruit-and tomato-basedbeverages. The identity of the participating firm was not revealed in the interview;discussion about price, quality, and value centered on consumerexperiencesandperceptionsrelatingto beverages in general rather than to the specific brands of the sponsoringcompany. The moderator'squestions covered such topics as the meaning of quality and value, the attributesused to evaluate quality and value, and the role of price in quality and value judgments. A total of 30 in-depthinterviews with female consumers were held in three metropolitanareas (one in the Southwest, one on the East Coast, and one in the Midwest). Free-elicitation approaches recommended by Olson and Reynolds (1983) were used to obtain information about the cognitive structures of consumers. These techniquesincludedtriadsorts and laddering. In the triad sorts, similar brands in the beverage category were divided into sets of three and subjectswere probedfor distinctionsamongthem. This initialprocess uncoveredthe importantdistinctionsthat respondentsused to discriminateamong products.The ladderingprocess, which followed the triad sorts, involved a sequenceof in-depthprobesdesignedto force the consumer up the ladder of abstraction.As these

procedureshad successfully elicited the more important higher levels of abstractionin previous studies (Gutman and Alden 1985; Reynolds, Gutman, and Fiedler 1984; Reynoldsand Jamieson1985), they were used to reveal the links among product attributes, quality, and value. After these indirectmethods, subjects respondedto open-endedquestionscovering such topics as informationneeded to makejudgmentsabout quality and value, impact of relatedfactors (e.g., advertising and packaging) on perceptions, and definitions of the concepts. Before debriefing, demographic and beverage usage data were collected from respondents. As is typical in exploratorystudies using meansend chains (e.g., Olson and Reynolds 1983), the data generatedwere not numerical. Instead, the data were in the form of protocols and means-end maps for individual consumers. Patterns of responses and observed similarities across individuals form the "results"of this type of exploratorystudy. Whencombined with the descriptivedata from the executive and focus group interviews, the observations and insights provide a frameworkfor speculating about the concepts and their relationships(Figure 1).

The Model Figure 1, an adaptationof a model first proposed by Dodds and Monroe (1985), affordsan overview of the relationshipsamong the concepts of price, perceived quality, and perceived value. In the following sections, relevant literatureand evidence from the exploratoryinvestigationare used to define and describe each concept in the model. To differentiatebetween proposed relationshipsand empirically supportedrelationships, discussion of each propositionis divided into two parts. First, propositions are developed on the basis of the qualitativedata from the exploratory study and other conceptual work from the literature. Second, for each proposition, empiricalevidence that supportsand refutes the propositionis reviewed.

The Concept of Perceived Quality Quality can be defined broadly as superiorityor excellence. By extension, perceived quality can be defined as the consumer's judgment about a product's overall excellence or superiority.1Perceivedquality is (1) different from objective or actual quality, (2) a higher level abstractionratherthan a specific attribute of a product,(3) a global assessmentthatin some cases 'Lewin's (1936) field theoretic approach to evaluating the instrumentality of actions and objects in achieving ends could be viewed as a foundation for this definition. In his view, instrumentality is the extent to which an object or action will achieve an end. In this case, quality could be viewed as instrumentality.

ConsumerPerceptionsof Price,Quality,and Value/ 3

FIGURE1 A Means-End Model Relating Price, Quality, and Value

I

I

0

Lower-level attributes Perceptions of lowerlevel attributes

GO Higher-level

resembles attitude, and (4) a judgment usually made within a consumer's evoked set. Objective quality versus perceived quality. Sev-

eralresearchers(Dodds and Monroe1984;Garvin1983; Holbrookand Corfman 1985; Jacoby and Olson 1985, Parasuraman,Zeithaml, and Berry 1986) have emphasized the difference between objective and perceived quality. Holbrookand Corfman(1985), for example, distinguishbetweenmechanisticand humanistic quality: ". ..

mechanistic [quality] involves an ob-

jective aspect or feature of a thing or event; humanistic [quality]involves the subjective response of people to objects and is therefore a highly relativistic phenomenon that differs between judges" (p. 33). "Objective quality" is the term used in the literature

(e.g., Hjorth-Anderson1984; Monroe and Krishnan 1985) to describe the actual technical superiorityor excellence of the products. As it has been used in the literature,the term "objective quality"refers to measurableand verifiable superiority on some predeterminedideal standard or standards.Publishedqualityratingsfrom sources such as Consumer Reports are used to operationalize the constructof objective quality in research studies (see 4 / Journalof Marketing, July1988

attributes

Curryand Faulds 1986). In recent years, researchers have debated the use of these measuresof quality on methodological grounds (Curry and Faulds 1986; Hjorth-Anderson1984, 1986; Maynes 1976; Sproles 1986). Concern centers on the selection of attributes and weights to measureobjective quality; researchers and experts (e.g., ConsumerReports)do not agree on what the ideal standardor standardsshouldbe. Others (such as Maynes 1976) claim that objective quality does not exist, that all quality evaluationsare subjective. The term "objectivequality"is relatedclosely tobut not the same as-other concepts used to describe technical superiorityof a product. For example, Garvin (1983) discusses product-basedquality and manufacturing-basedquality. Product-basedquality refers to amounts of specific attributesor ingredientsof a product. Manufacturing-basedquality involves conformance to manufacturingspecifications or service standards. In the prevailing Japanese philosophy, quality means "zero defects-doing it right the first time." Conformanceto requirements(Crosby 1979) and incidence of internaland externalfailures(Garvin 1983) are other definitions that illustratemanufacturing-orientednotions of quality.

These concepts are not identical to objective quality becausethey, too, arebased on perceptions.Though measuresof specifications may be actual (ratherthan perceptual), the specifications themselves are set on the basis of what managersperceive to be important. Managers' views may differ considerably from consumers'or users' views. ConsumerReportsratingsmay not agreewith managers'assessmentsin termsof either salient attributesor weights assigned to the attributes. In a researchstudyfor GeneralElectric,Morgan(1985) points out striking differences between consumer, dealer, and managerperceptionsof appliancequality. When asked how consumers perceive quality, managers listed workmanship,performance,and form as critical components. Consumersactually keyed in on different components: appearance, cleanability, and durability. Similarly, company researchersin the exploratorystudy measuredbeverage quality in terms of "flavorroundedness"and "astringency"whereasconsumers focused on purity (100% fruit juice) and sweetness. To reiterate, perceived quality is defined in the model as the consumer's judgment about the superiority or excellence of a product. This perspective is similar to the user-based approachof Garvin (1983) and differs from product-basedand manufacturingbased approaches. Perceived quality is also different from objective quality, which arguablymay not exist because all quality is perceived by someone, be it consumers or managers or researchersat Consumer Reports. Higher level abstraction rather than an attribute.

The means-end chain approachto understandingthe cognitive structureof consumers holds that product informationis retainedin memory at several levels of abstraction(Cohen 1979; Myers and Shocker 1981; Olson and Reynolds 1983; Young and Feigen 1975). The simplest level is a product attribute;the most complex level is the value or payoff of the productto the consumer. Young and Feigen (1975) depicted this view in the "Greybenefitchain,"which illustrateshow a product is linked through a chain of benefits to a concept called the "emotionalpayoff." Product -> Functional > Practical -> Emotional

Benefit

Benefit

Payoff

Related conceptualizations (Table 1) pose the same essential idea: consumers organize information at various levels of abstraction ranging from simple product attributes (e.g., physical characteristics of Myers and

Shocker 1981, defining attributes of Cohen 1979, concrete attributesof Olson and Reynolds 1983) to complex personal values. Quality has been included in multiattributemodels as though it were a lower level

attribute(criticisms of this practice have been leveled by Ahtola 1984, Myers and Shocker 1981, and oth-

ers), but perceived quality is instead a second-order

phenomenon:an abstractattributein Olson and Reynold's (1983) terms, a "B" attribute(somewhat abstract, multidimensional but measurable) in Myers and Shockers' (1981) formulation. Global assessment similar to attitude. Olshavsky (1985) views quality as a form of overall evaluation of a product, similar in some ways to attitude. Holbrook and Corfman (1985) concur, suggesting that quality is a relatively global value judgment. Lutz (1986) proposes two forms of quality, "affective quality" and "cognitive quality." Affective quality parallels Olshavsky's and Holbrook and Corfman's views

of perceived quality as overall attitude. Cognitive quality is the case of a superordinateinferential assessment of quality interveningbetween lower order cues and an eventual overall productevaluation (Lutz 1986). In Lutz's view, the higher the proportion of

attributesthat can be assessed before purchase(search attributes) to those that can be assessed only during

consumption (experience attributes),the more likely it is that quality is a higher level cognitive judgment. Conversely, as the proportion of experience attributes increases, quality tends to be an affective judgment. Lutz extends this line of reasoning to propose that af-

fective quality is relatively more likely for services and consumer nondurable goods (where experience attributes dominate) whereas cognitive quality is more likely for industrial products and consumer durable goods (where search attributes dominate). Judgment made within consumer's evoked set. Evaluations of quality usually take place in a comparison context. Maynes (1976) claimed that quality evaluations are made within "the set of goods which . . . would in the consumer's judgement serve the same general purpose for some maximum outlay." On the basis of the qualitative study, and consistent with Maynes' contention, the set of products used in comparing quality appears to be the consumer's evoked set. A product's quality is evaluated as high or low depending on its relative excellence or superiority among products or services that are viewed as substitutes by the consumer. It is critical to note that the specific set of products used for comparison depends on the consumer's, not the firm's, assessment of competing products. For example, consumers in the exploratory study compared the quality of different brands of orange juice (which would be the comparison context of the firm), the quality of different forms (refrigerated vs. canned), and the quality of purchased versus homemade orange juice. Figure 2 depicts the perceived quality component of the conceptual model in Figure 1. PQI: Consumers use lower level attribute cues

to infer quality.

ConsumerPerceptionsof Price,Quality,and Value/ 5

Selected

TABLE 1 Means-End Chain Models and Their Proposed Relationships

Scheme Young and Feigin (1975) Rokeach (1973) Howard (1977) Myers and Shocker (1981) Geistfeld, Sproles, and Badenhop (1977) Cohen (1979)

Attribute Level

Quality Level

with Quality and Value Personal Value Value Level Level Emotional payoff

Functional benefits Product attributes

Practical benefit Choice criteria

Instrumental values

Terminal values

Physical characteristics

Pseudophysical characteristics

Task or outcome referent

User referent

Concrete, unidimensional, and measurable attributes (C) Defining attributes

Somewhat abstract, multidimensional but measurable (B)

Attributes Gutman and Reynolds (1979) Concrete attributes Olson and Reynolds (1983)

Highly valued states

Instrumental attributes Consequences

Va

Abstract attributes

Holbrook and Corfman (1985) note that early philosophers used the word "quality" to refer to explicit features (i.e., properties or characteristics) of an object as perceived by a subject (e.g., Austin 1964, p. 44; Russell 1912). Olshavsky (1985) terms this tendency to infer quality from specific attributes "surrogate-based preference forming behavior" and cites examples of product categories in which a given surrogate is highly associated with quality (e.g., size signals quality in stereo speakers, style signals quality in cars and clothes). In the exploratory study, consumers repeatedly associated quality in fruit juices with purity (e.g., 100% fruit juice with no sugar added) or freshness. In these and other product categories, one or a few attributes from the total set of attributes appear to serve as reliable signals of product quality. Attributes that signal quality have been dichotomized into intrinsic and extrinsic cues (Olson 1977; Olson and Jacoby 1972). Intrinsic cues involve the physical composition of the product. In a beverage, intrinsic cues would include such attributes as flavor, color, texture, and degree of sweetness. Intrinsic attributes cannot be changed without altering the nature of the product itself and are consumed as the product is consumed (Olson 1977; Olson and Jacoby 1972). Extrinsic cues are product-related but not part of the physical product itself. They are, by definition, outside the product. Price, brand name, and level of advertising are examples of extrinsic cues to quality. The intrinsic-extrinsic dichotomy of quality cues is useful for discussing quality but is not without con-

6 / Journalof Marketing, July1988

Abstract, multidimensional, and difficult to measure attributes (A)

Functional consequences Psychosocial consequences Instrumental values

Terminal values

ceptual difficulties.2 A small number of cues, most notably those involving the product's package, are difficult to classify as either intrinsic or extrinsic. Package could be considered an intrinsic or an extrinsic cue depending on whether the package is part of the physical composition of the product (e.g., a dripless spout in detergent or a squeezable ketchup container), in which case it would be an intrinsic cue, or protection and promotion for the product (e.g., a cardboard container for a computer), in which case it would be an extrinsic cue. For purposes of the model, package is considered an intrinsic cue but the information that appears on the package (e.g., brand name, price, logo) is considered an extrinsic cue. Evidence. Researchers have identified key lower level attributes used by consumers to infer quality in only a few product categories. These lower level cues include price (Olson 1977; Olson and Jacoby 1972), suds level for detergents, size for stereo speakers (01shavsky 1985), odor for bleach and stockings (Laird 1932), and produce freshness for supermarkets (Bonner and Nelson 1985). 2Othermethods of classification could have been used for these cues. Possible alternative classification schemes include (1) tangible/intangible, (2) distal/proximal (Brunswick 1956), and (3) direct/inferential. However, each of these dichotomies has the same "fuzzy set" problems that are inherent in the intrinsic/extrinsic dichotomy. Notably, with each scheme, some cues (particularly package) would be difficult to classify. Because the intrinsic/extrinsic dichotomy has a literature underpinning it, because it is widely used and recognized, and because it has clear managerial implications, it was retained in this review.

FIGURE2 The Perceived Quality Component

Perceived Quality

I Extrinsic Attributes Intrinsic Attributes

I

Perceptions of lower-

O

level attributes )

PQ2: The intrinsic product attributes that sig-

nal quality are product-specific, but dimensions of quality can be generalized to productclasses or categories. Generalizingaboutqualityacrossproductshas been difficult for managers and researchers. Specific or concrete intrinsic attributesdiffer widely across products, as do the attributesconsumers use to infer quality. Obviously, attributesthat signal quality in fruit juice are not the same as those indicating quality in washing machines or automobiles. Even within a productcategory, specific attributesmay provide different signals about quality. For example, thickness is related to high quality in tomato-basedjuices but not in fruit-flavoredchildren's drinks. The presence of pulp suggests high quality in orangejuice but low quality in apple juice. Though the concrete attributesthat signal quality differ across products, higher level abstract dimensions of quality can be generalized to categories of products.As attributesbecome more abstract(i.e., are

Higher-level abstractions

higher in the means-end chains), they become common to more alternatives. Garvin (1987), for example, proposes that productquality can be capturedin eight dimensions: performance, features, reliability, conformance,durability,serviceability,aesthetics,and perceived quality (i.e., image). Abstract dimensions that capturediverse specific attributeshave been discussed by Johnson(1983) and Achrol, Reve, and Stem (1983). In describing the way consumers compare noncomparablealternatives (e.g., how they choose between such diverse alternatives as a stereo and a Hawaiian vacation), Johnson posited that consumers representthe attributesin memory at abstractlevels (e.g., using entertainmentvalue as the dimension on which to compare stereos and Hawaiian vacations). Similarly, Achrol, Reve, and Ster proposedthat the multitudeof specific variables affecting a firm in the environmentcan be capturedin abstractdimensions. Rather than itemizing specific variables that affect particularfirms in different industries under varying circumstances,they proposedconceptualizingthe environmentin terms of its abstractqualities or dimen-

Consumer of Price,Quality,andValue/ 7 Perceptions

sions (e.g., homogeneity-heterogeneity, stability-instability, concentration-dispersion, and turbulence). Olson (1978) pointed out that consumers may use informational cues to develop beliefs about products and that task response (i.e., choice or evaluation) may be a direct function of these mediating beliefs. According to Olson, these beliefs may be of two types: descriptive, which involve a restatement of the original information in more abstract terms (e.g., "accelerates from 0 to 60 in 5 seconds" generates the belief "high performance") and inferential, which involve an inference to information missing in the environment (e.g., "accelerates from 0 to 60 in 5 seconds" generates the belief "probably corers well, too"). This distinction roughly parallels Alba and Hutchinson's (1987) distinction between interpretive and embellishment inferences and both dichotomies illustrate the level at which dimensions of quality can be conceptualized. Interviews with subjects in the exploratory study suggested that specific intrinsic attributes used to infer quality could not be generalized across beverages, but that higher level abstract dimensions could capture the meaning of perceived quality in whole categories or classes of beverages. Purity, freshness, flavor, and appearance were the higher level abstract dimensions subjects discussed in defining quality in the beverage category. Evidence. In a study of quality in long distance telephone, banking, repair and maintenance, and brokerage services, Parasuraman, Zeithaml, and Berry (1985) found consistent dimensions of perceived quality across four consumer service industries. These abstract dimensions included reliability, empathy, assurance, responsiveness, and tangibles. Similarly, Bonner and Nelson (1985) found that sensory signals such as rich/full flavor, natural taste, fresh taste, good aroma, and appetizing looks-all higher level abstract dimensions of perceived quality-were relevant across 33 food product categories. Brucks and Zeithaml (1987) contend on the basis of exploratory work that six abstract dimensions (ease of use, functionality, performance, durability, serviceability, and prestige) can be generalized across categories of durable goods. Though empirical research has not verified the generalizability of dimensions for categories of packaged goods other than food products, for durable goods, or for industrial goods, abstract dimensions spanning these categories could be conceptualized, verified, and then used to develop general measures of quality in product categories. PQ3: Extrinsic cues serve as generalized quality indicators across brands, products, and categories. Extrinsic attributes (e.g., price, brand name) are

8 / Journalof Marketing, July1988

not product-specific and can serve as general indicators of quality across all types of products. Price, brand name, and level of advertising are three extrinsic cues frequently associated with quality in research, yet many other extrinsic cues are useful to consumers. Of special note are extrinsic cues such as product warranties and seals of approval (e.g., Good Housekeeping). Price, the extrinsic cue receiving the most research attention (see Olson 1977 for a complete review of this literature), appears to function as a surrogate for quality when the consumer has inadequate information about intrinsic attributes. Similarly, brand name serves as a "shorthand" for quality by providing consumers with a bundle of information about the product (Jacoby et al. 1978; Jacoby, Szybillo, and Busato-Schach 1977). Level of advertising has been related to product quality by economists Nelson (1970, 1974), Milgrom and Roberts (1986), and Schmalensee (1978). The basic argument holds that for goods whose attributes are determined largely during use (experience goods), higher levels of advertising signal higher quality. Schmalensee argues that level of advertising, rather than actual claims made, informs consumers that the company believes the goods are worth advertising (i.e., of high quality). Supporting this argument is the finding that many subjects in the exploratory study perceived heavily advertised brands to be generally higher in quality than brands with less advertising. The exploratory investigation of beverages provided evidence that form of the product (e.g., frozen vs. canned vs. refrigerated) is an additional important extrinsic cue in beverages. Consumers held consistent perceptions of the relative quality of different forms of fruit juice: quality perceptions were highest for fresh products, next highest for refrigerated products, then bottled, then frozen, then canned, and lowest for dry product forms. Evidence. The literature on hedonic quality measurement (Court 1939; Griliches 1971) maintains that price is the best measure of product quality. Considerable empirical research has investigated the relationship between price and quality (see Olson 1977 for a review of this literature in marketing) and has shown that consumers use price to infer quality when it is the only available cue. When price is combined with other (usually intrinsic) cues, the evidence is less convincing. In forming impressions about quality of merchandise, respondents in a study by Mazursky and Jacoby (1985) selected brand name more frequently than any other information. Gardner (1970, 1971) found significant main effects on quality perceptions due to brand name. Kirmani and Wright (1987a,b) found empirical support for the relationship between level of spending

on advertising and quality inferences. Manipulating expenditureson media budgets and on productionelements in advertisements, they found significant effects of both on consumers' quality perceptions. Bonner and Nelson (1985) confirm that product form relatesto qualityperceptions.An empiricalstudy revealedthe same hierarchyof qualityin packageform (fresh, refrigerated,frozen, bottled, canned, dried) as was found in the exploratorystudy. Bonner and Nelson conclude: "The sensory maintenance ability of packaging differs by type and those packaging forms that can best deliver a rich/full flavor, natural and fresh taste, good aroma, and an appetizing appearance, are likely to gain marketshare" (p. 75). PQ4:Consumersdependon intrinsicattributes more than extrinsic attributes (a) at the point of consumption, (b) in prepurchasesituations when intrinsic attributesare searchattributes (rather than experience attributes), and (c) when the intrinsicattributeshave high predictive value. Which type of cue-intrinsic or extrinsic-is more importantin signaling quality to the consumer? An answerto this questionwouldhelp firmsdecidewhether to invest resourcesin productimprovements(intrinsic cues) or in marketing(extrinsic cues) to improve perceptions of quality. Finding a simple and definitive answerto this question is unlikely, but the exploratory study suggests the type of attributethatdominatesdepends on several key contingencies. The first contingency relates to the point in the purchasedecision and consumptionprocess at which quality evaluation occurs. Consumers may evaluate quality at the point of purchase (buying a beverage) or at the point of consumption(drinkinga beverage). The salience of intrinsicattributesat the point of purchase depends on whether they can be sensed and evaluated at that time, that is, whether they contain search attributes(Nelson 1970). Where search attributes are present (e.g., sugar content of a fruit juice or color or cloudiness of a drink in a glass jar), they may be importantquality indicators.In their absence, consumers depend on extrinsic cues. At the point of consumption, most intrinsic attributes can be evaluated and therefore become accessible as quality indicators.Many consumersin the exploratorystudy on beverages used taste as the signal of quality at consumption. If a beverage did not taste fresh or tasted "tinny"or too thin, the evaluationwas that quality was low. Consumersdepend on intrinsicattributeswhen the cues have high predictive value (Cox 1962). Many respondentsin the exploratorystudy, especially those

expressingconcernfor their chidren'shealthand teeth, unequivocally stated that purity (100% juice, no sugar)

was the criterionthey used to judge quality across the broad fruit juice category. The link between quality and this intrinsic attributewas clear and strong: all fruit beverages with 100% juice were high quality

beverages and all others were not. Evidence. Researchers addressing this question (Darden and Schwinghammer 1985; Etgar and Malhotra 1978; Olson and Jacoby 1972; Rigaux-Bricmont 1982; Szybillo and Jacoby 1974) have concluded that intrinsiccues were in general more importantto consumers in judging quality because they had higher predictive value than extrinsic cues. This conclusion does not account for the fact that many assessments about quality are made with insufficient information about intrinsiccues. Selected individualstudies (e.g., Sawyer, Worthing,and Sendak 1979) have shown that extrinsiccues can be more importantto consumersthan intrinsic cues. Conflicting evidence about the importance of intrinsic and extrinsic cues becomes clearer if the conditions under which each type of cue becomes importantare investigated. PQ5:Consumers depend on extrinsic attributes more than intrinsic attributes (a) in initial purchase situations when intrinsiccues are not available (e.g., for services), (b) when evaluationof intrinsiccues requires more effort and time than the consumer perceives is worthwhile, and when (c) quality is difficult to evaluate (experience and credence goods). Extrinsic cues are posited to be used as quality indicatorswhen the consumeris operatingwithout adequate informationabout intrinsic product attributes. This situation may occur when the consumer (1) has little or no experience with the product, (2) has insufficient time or interest to evaluate the intrinsic attributes, and (3) cannot readily evaluate the intrinsic attributes. At point of purchase, consumers cannot always evaluate relevantintrinsicattributesof a product. Unless free samples are being provided, consumerscannot taste new food productsbefore buying them. Consumers do not know for certain how long a washing machine or automobile will last until they purchase and consume it. In these and similar situations, the consumer relies on extrinsic attributessuch as warranty, brandname, and package as surrogatesfor intrinsic productattributes. At other times, intrinsic attributes on which to evaluate quality are available but the consumer is un-

of Price,Quality,andValue/ 9 Consumer Perceptions

willing or unable to expend the time and effort to evaluate them. Working women, men, and single shoppers, for example, have been reported to use supermarket product information significantly less than other demographic segments (Zeithaml 1985), in part because these segments are more time-conscious than other segments (Zeithaml 1985; Zeithaml and Berry 1987). Working women interviewed in the exploratory study reported that they shopped quickly and could not study nutritional information carefully on beverage containers. They selected beverages on the basis of the freshness or quality conveyed by packages or brand names. In other situations, intrinsic product attributes indicating quality are simply too difficult for the consumer to evaluate. Evaluation may be difficult prior to purchase, as with haircuts, restaurant meals, and other experience goods. Complex stereo equipment, insurance policies, and major auto repairs are examples of products that for many consumers are difficult to evaluate even after purchase and consumption. For these "credence goods" (Darby and Karni 1973), consumers may rely on extrinsic cues because they are simpler to access and evaluate. Evidence. Research has shown that price is used as a quality cue to a greater degree when brands are unfamiliar than when brands are familiar (Smith and Broome 1966; Stokes 1985). Research also has shown that when perceived risk of making an unsatisfactory choice is high, consumers select higher priced products (Lambert 1972; Peterson and Wilson 1985; Shapiro 1968, 1973). PQ6: The cues that signal quality change over

time because of (a) competition, (b) promotional efforts of companies, (c) changing consumer tastes, and (d) information.

As improved technology and increasing competition lead to the development of technically better products, the features that signal superiority change. The exploratory study suggested that the attribute cues signaling quality in beverages are not static, but instead change over time. The shift from canned orange juice to frozen orange juice to refrigerated orange juice is one example of the evolving standards of quality in beverages. The replacement of saccharin with Nutrasweet in beverages is another. Harness (1978, p. 17) illustrates the forces of change and the responses made by Procter & Gamble to keep Tide detergent the highest quality brand in the packaged soap category: Since Tide was first introducedin 1947, consumers havechanged,washingmachineshave changed,fab-

10 / Journalof Marketing,July 1988

rics have changed, laundry habits have changed, and competition

has changed.

. . . These are just a few

of the more significant changes in the household laundry market, and every one of these changes has a meaning for the performanceand the marketingplans for Tide. The product which we are selling today is importantly different from the Tide product which we introduced in 1947. It is different in its cleaning performance, in sudsing characteristics, aesthetics, physical properties, packaging. In total, there have been 55 significant modifications in this one brand during its 30-year lifetime.

The Concept of Perceived Price From the consumer's perspective, price is what is given up or sacrificed to obtain a product. This definition is congruent with Ahtola's (1984) argument against including monetary price as a lower level attribute in multiattribute models because price is a "give" component of the model, rather than a "get" component. Defining price as a sacrifice is consistent with conceptualizations by other pricing researchers (Chapman 1986; Mazumdar 1986; Monroe and Krishnan 1985). Figure 1 delineates the components of price: objective price, perceived nonmonetary price, and sacrifice. Jacoby and Olson (1977) distinguished between objective price (the actual price of a product) and perceived price (the price as encoded by the consumer). Figure 1 emphasizes this distinction: objective monetary price is frequently not the price encoded by consumers. Some consumers may notice that the exact price of Hi-C fruit juice is $1.69 for a 6-pack, but others may encode and remember the price only as "expensive" or "cheap." Still others may not encode price at all. A growing body of research supports this distinction between objective and perceived price (Allen, Harrell, and Hutt 1976; Gabor and Granger 1961; Progressive Grocer 1964). Studies reveal that consumers do not always know or remember actual prices of products. Instead, they encode prices in ways that are meaningful to them (Dickson and Sawyer 1985; Zeithaml 1982, 1983). Levels of consumer attention, awareness, and knowledge of prices appear to be considerably lower than necessary for consumers to have accurate internal reference prices for many products (Dickson and Sawyer 1985; Zeithaml 1982). Dickson and Sawyer reported that the proportions of consumers checking prices of four types of products (margarine, cold cereal, toothpaste, and coffee) at point of purchase ranged from 54.2 to 60.6%. Among the groups of consumers not checking prices in these studies, a large proportion (from 58.5 to 76.7% in the four product categories) stated that price was just not important. Another recent study indicates that price awareness differs among demographic groups, the greatest levels of awareness being in consumers who are female, married, older, and do not work outside

the home (ZeithamlandBerry1987). Attentionto prices is likely to be greaterfor higherpricedpackagedgoods, durablegoods, and services than for low priced beverages, but other factors in these categories-complexity, lack of price information,and processingtime required-may interfere with accurateknowledge of prices. An additional factor contributingto the gap between actual and perceived price is price dispersion, the tendency for the same brands to be priced differently across stores or for products of the same type and quality to have wide price variance(Maynes and Assum 1982). Ppl: Monetary price is not the only sacrifice perceived by consumers. Full price models in economics(e.g., Becker 1965) acknowledge that monetaryprice is not the only sacrifice consumersmake to obtainproducts.Time costs, search costs, and psychic costs all enter either explicitly or implicitly into the consumer's perception of sacrifice. If consumers cannot find products on the shelf, or if they must travel distances to buy them, a sacrifice has been made. If consumers must expend effort to assemble durableproductsor time to prepare packaged goods, and if this time and effort does not provide satisfaction to the consumer in the form of recreationor a hobby, a sacrifice has been made. Evidence. Researchin economics, home economics, and marketingsupportsthe propositionthat other costs-time, effort, search, psychic-are salient to consumers(Down 1961; Gronau1973;Leibowitz 1974; Leuthold1981;Linder1970;Mabry1970;Mincer1963; Nichols, Smolensky, and Tideman1971; Zeithamland Berry 1987).

The Price-QualityRelationship Nearly 90 research studies in the past 30 years have been designed to test the general wisdom that price and quality are positively related. Despite the expectation of a positive relationship,results of these studies have provided mixed evidence. PPQI:A general price-perceived quality relationship does not exist. Price reliance is a general tendency in some consumers to depend on price as a cue to quality (Lambert 1972; Shapiro 1968, 1973). The body of literature summarized by Olson (1977) is based on the assumptionthat a general price-perceived quality relationshipexists. Despite a multitudeof experimental studies on the topic, however, the relationshiphas not surfaced clearly except in situations where methodologicalconcernssuch as demandartifacts(Sawyer1975) could offer alternative explanations for the results

(Monroe and Krishnan1985; Olson 1977). Bowbrick (1982) questioned the universality of the price-perceived quality relationship,called the streamof studies on the topic "pseudoresearch,"and claimed that the price-perceived quality hypothesis is too general and untestable to produce anything other than trivial results. Petersonand Wilson (1985) argue that the relationship between price and perceived quality is not universaland thatthe directionof the relationshipmay not always be positive. Evidence. Monroe and Krishnan(1985) concluded thata positive price-perceivedqualityrelationshipdoes appearto exist despite the inconsistency of the statistical significance of the research findings. They also noted, however, that multipleconceptualproblemsand methodological limitationscompromisedprevious research. Monroe and Dodds (1988) describe these limitations in greaterdetail and delineate a researchprogram for establishing the validity of the price-quality relationship. Many empiricalstudies have producedresults that conflict with Monroe and Krishnan'sassessment of a positiverelationship.In severalstudies(Friedman1967; Swan 1974), overall association between price and perceived quality is low. Other studies show the relationshipto be nonlinear(Peterson1970; Petersonand Jolibert 1976), highly variable across individuals (Shapiro 1973), and variable across products being judged (Gardner1971). Other research, summarized by Olson (1977), shows that price becomes less importantas a quality indicatorwhen other productquality cues, such as brandname (Gardner1971) or store image (Stafford and Enis 1969), are present. Exploratory and survey research (Bonner and Nelson 1985; Parasuraman,Zeithaml,and Berry 1985) indicatesthat price is among the least importantattributesthat consumers associate with quality. Related studies (summarizedby Hjorth-Anderson 1984) have consistently shown price to be correlated only weakly with objective (rather than perceived) quality. Typical of these studies is work by Sproles (1977), who correlated the prices of products with qualityratingsobtainedthroughConsumerReportsand Consumers' Research Magazine. Though a positive

price-objective qualityrelationshipwas found in 51% of the 135 productcategories,no relationshipwas found in 35% and a negative relationshipwas found in 14%. Similarly, Riesz found the mean rank correlationbetween price and objective quality to be .26 for 685 productcategories reportedin ConsumerReports between 1961 and 1975 and .09 for 679 brandsof packaged foods (Riesz 1978). Geistfeld (1982) found variability among marketsand across stores in the priceobjective qualityrelationship.Most recently, Gerstner (1985) assessed the correlation between quality and

of Price,Quality,andValue/ 11 Consumer Perceptions

price for 145 products and concluded that the relationshipappearedto be product-specificand generally weak. Both Peterson and Wilson (1985) and Olshavsky (1985) arguethatthe emphasisin price-qualitystudies should not be on documentingthe general price-perceived quality relationship,but on the conditions under which price informationis likely to lead to an inference about productquality. One possibility is that some individualsrely heavily on price as a quality signal whereasothersdo not. Petersonand Wilson sorted respondentsinto groups on the basis of their having a price-relianceschema and confirmed in an experiment that "schematics"perceive a stronger relationship between price and quality than "aschematics." This general tendency on the part of some consumers to associate price and quality has been examined in the contextof covariationassessmentby Roedder-John, Scott, and Bettman (1986), who confirmed that consumersdiffer in their beliefs about the associationbetween the price and quality variables. These studies provideevidence that some consumershave a schema of price reliance, ratherthan indicating a generalized tendency in consumersto associate price and quality. PPQ2:The use of price as an indicatorof quality depends on (a) availabilityof othercues to quality, (b) price variation within a class of products, (c) product quality variation within a category of products, (d) level of price awareness of consumers, and (e) consumers' ability to detect quality variationin a group of products. Monroeand Krishnan(1985) contendthatmost past price-perceived quality researchhas been exploratory andhas not succeededin resolvingthe questionof when price is used to infer quality. Contingencies affecting the use of price as a quality indicator fit into three groups: informationalfactors, individual factors, and productcategory factors. The first category of factors believed to affect the price-perceived quality relationshipconsists of other informationavailableto the consumer. When intrinsic cues to qualityarereadilyaccessible,whenbrandnames provide evidence of a company's reputation,or when level of advertisingcommunicatesthe company's belief in the brand,the consumermay preferto use those cues instead of price. Several individualdifference factors may account for the variationin the use of price as a quality signal. One explanatory variable is price awareness of the consumer:consumers unaware of product prices obviously cannot use price to infer quality. Another in-

of Marketing, 12 / Journal July1988

dividual difference is consumers' ability to detect quality variation among products (Lambert 1972). If the consumerdoes not have sufficient productknowledge (or perhapseven interest)to understandthe variation in quality (e.g., French, Williams, and Chance 1973), price and other extrinsic cues may be used to a greaterdegree. Consumers appear to depend more on price as a quality signal in some productcategories than in others. One explanationfor this variationmay be differences in price-objective quality relationshipsby category (e.g., the low price of Japaneseautomobilesdoes not diminishthe well-establishedperceptionof quality in the category). Another explanation may be price variationin a category. In packaged goods categories (such as beverages)whereproductsdifferlittle in price, the consumermay not attributehigher quality to products that cost only a few cents more than those of competitors.Respondentsin the exploratorystudy, for example, did not associate beverage price with quality. Still anothercategory-specificcontingencyis quality variation: in categories where little variation is expected among brands(such as salt or paper sandwich bags), price may functiononly as an indicationof sacrifice whereas in categories where quality variationis expected (such as canned seafood or washing machines), price may function also as an indication of quality. Evidence. Olson (1977) showed that availability of intrinsic and extrinsic cues other than price typically results in weighting those factors (e.g., brand name) as more importantthan price. He concluded that brandname is a strongercue than price for evaluating overall quality (Gardner1971; Jacoby, Olson, and Haddock 1973; Smith and Broome 1966; Stokes 1985). Studies have indicated that use of price as a qualindicator differs by product category. Except for ity wine and perfume,most positive links have been found in durable rather than in nondurableor consumable products(Gardner1970; Lambert1972; Peterson and Wilson 1985). In an experimentalsetting, Petersonand Wilson documented the relationship between price variationand price-perceived quality association:the greaterthe price variation,the greaterthe tendencyfor consumers to use price as a quality indicator. In a recent meta-analysisof 41 studies investigating the association between price and perceived quality, Rao and Monroe (1987) found that the type of experimental design and the magnitude of the price manipulationsignificantly influenced the size of the price-perceived quality effects obtained. The number of cues manipulatedand the price level were not found to have a significanteffect. Because of constraintsimposed by the meta-analysis,the reviewersincludedonly

consumer products and eliminated several studies as outliers, so the full range of prices and types of products was not investigated. Considerable empirical research supports individual differences in consumer knowledge of prices. Consumers are not uniformly aware of prices and certain consumer segments (such as working women and men) are less aware of prices than other segments (Zeithaml 1985; Zeithaml and Berry 1987; Zeithaml and Fuerst 1983). Price awareness level has not been studied as it relates to quality perceptions, though Rao (1987) documented the impact of prior knowledge of products on the use of price as a quality cue.

The Concept of Perceived Value When respondents in the exploratory study discussed value, they used the term in many different ways, describing a wide variety of attributes and higher level abstractions that provided value to them. What conin a single product categorystitutes value-even appears to be highly personal and idiosyncratic. Though many respondents in the exploratory study agreed on cues that signaled quality, they differed considerably in expressions of value. Patterns of responses from the exploratory study can be grouped into four consumer definitions of value: (1) value is low price, (2) value is whatever I want in a product, (3) value is the quality I get for the price I pay, and (4) value is what I get for what I give. Each definition involves a different set of linkages among the elements in the model and each consumer definition has its counterpart in the academic or trade literature on the subject. The diversity in meanings of value is illustrated in the following four definitions and provides a partial explanation for the difficulty in conceptualizing and measuring the value construct in research. Value is low price. Some respondents equated value with low price, indicating that what they had to give up was most salient in their perceptions of value. In their own words: * Value is price-which one is on sale. * When I can use coupons, I feel that the juice is a value. * Value means low price. * Value is whatever is on special this week.

* * * *

Value is what is good for you. Value is what my kids will drink. Little containers because then there is no waste. Value to me is what is convenient. When I can take it out of the refrigerator and not have to mix it up, then it has value.

This second definition is essentially the same as the economist's definition of utility, that is, a subjective measure of the usefulness or want satisfaction that results from consumption. This definition also has been expressed in the trade literature. Value has been defined as "whatever it is that the customer seeks in making decisions as to which store to shop or which product to buy" (Chain Store Age 1985). Schechter (1984) defines value as all factors, both qualitative and quantitative, subjective and objective, that make up the complete shopping experience. In these definitions, value encompasses all relevant choice criteria. Value is the quality I get for the price I pay. Other respondents conceptualized value as a tradeoff between one "give" component, price, and one "get" component, quality: * Value is price first and quality second. * Value is the lowest price for a quality brand. * Value is the same as quality. No-value is affordable quality. This definition is consistent with several others that appear in the literature (Bishop 1984; Dodds and Monroe 1984; Doyle 1984; Shapiro and Associates 1985). Value is what I get for what I give. Finally, some respondents considered all relevant "get" components as well as all relevant "give" components when describing value: * Value is how many drinks you can get out of a certain package. Frozen juices have more because you can water them down and get more out of them. * How many gallons you get out of it for what the price is. * Whatever makes the most for the least money.

In industry studies, Schechter (1984) and Bishop (1984) identified subsets of consumers that equate value with price. Other industry studies, including Hoffman's (1984), reveal the salience of price in the value equations of consumers.

* Which juice is more economical. 0 Value is what you are paying for what you are getting. * Value is price and having single portions so that there is no waste.

Value is whatever I want in a product. Other respondents emphasized the benefits they received from the product as the most important components of value:

This fourth definition is consistent with Sawyer and Dickson's (1984) conceptualization of value as a ratio of attributes weighted by their evaluations divided by

of Price,Quality,andValue/ 13 Consumer Perceptions

price weighted by its evaluation. This meaning is also similar to the utility per dollar measureof value used by Hauser and Urban (1986), Hauser and Simmie (1981), Hauser and Shugan (1983), and others. These four consumer expressions of value can be capturedin one overall definition: perceived value is the consumer's overall assessment of the utility of a productbased on perceptionsof what is received and what is given. Though what is received varies across consumers (i.e., some may want volume, others high quality, still others convenience) and what is given varies (i.e., some are concernedonly with money expended, others with time and effort), value represents a tradeoff of the salient give and get components. Value and quality. In the means-endchains, value (like quality) is proposedto be a higher level abstraction. It differs from quality in two ways. First, value is more individualisticand personal than quality and is therefore a higher level concept than quality. As shown in Table 1, value may be similar to the "emotional payoff" of Young and Feigen (1975), to "abstract, multi-dimensional, difficult-to-measure attributes" of Geistfeld, Sproles, and Badenhop (1977), and to "instrumentalvalues" of Olson and Reynolds (1983). Second, value (unlike quality) involves a tradeoff of give and get components. Though many conceptualizationsof value have specified quality as the only "get" component in the value equation, the consumer may implicitly include other factors, several that are in themselves higher level abstractions, such as prestige and convenience (see Holbrook and Corfman 1985 for a discussion of the difficulty involved in separatingthese abstractionsin the value construct). Pv1: The benefit componentsof value include salient intrinsic attributes, extrinsic attributes,perceivedquality, and otherrelevant high level abstractions. Differences among the benefit or get components shown in the model and listed in Pvl can be illustrated by findings from the exploratorystudy of fruitjuices. As discussed before, perceived quality in fruit juices was signaled by the attribute "100% fruit juice" plus

sensory attributessuch as taste and texture. Some intrinsicattributesof fruitjuices-other than those signalingquality-were cited as providingvalue to respondents.Color was one importantintrinsic attribute. Most mothers knew which colors or flavors of juice their childrenwould drink;only those flavors were considered to be acceptable to the child and thereforeto have value for the mother. Otherintrinsic attributes(e.g., absence of pulp and visible consistency of the drinks) also affected value perceptions. In additionto perceived quality and these intrinsic

14 / Journalof Marketing, July1988

attributes,other higher level abstractionscontributed to perceptionsof value. A frequentlymentionedhigher level abstractionfor fruitjuice was convenience. Some consumersdid not want to reconstitutethe juice. Others wanted self-serve containersso that childrencould get juice from the refrigeratorby themselves. For this reason, small cans with difficult-to-opentops were not as convenient as little boxes with insertable straws. Fully reconsituted, ready-to-serve, and easy-to-open containerswere keys to adding value in the category. These intrinsicandextrinsiclower level attributesadded value through the higher level abstractionof convenience.

Anotherhigher level abstractionimportantin providing value in children's fruit juices was appreciation. When children drankbeverages the mothers selected, when they mentioned them to mother or evidenced thanks, the mothers obtained value. This particularpsychological benefit was not evoked directly in any of the consumer interviews, but came through strongly in the ladderingprocess. The value perceptions filtered through the higher level abstraction of appreciationand did not come directly through intrinsicor extrinsic attributes.This indirectinferencing process illustratesa major difficulty in using traditional multiattributeor utility models in measuring perceived value. The intrinsic attributesthemselves are not always directly linked to value, but instead filter through other personal benefits that are themselves abstract. Evidence. Though no empirical researchhas been reported on the pivotal higher level abstractionsrelated to value, several dimensionshave been proposed in selected categories. Bishop (1984), for example, claimed that value in supermarketshopping is a composite of the higher level abstractionsof variety, service, and facilities in addition to quality and price. Doyle (1984) identified convenience, freshness, and time as major higher level abstractionsthat combine with price and quality to producevalue perceptionsin supermarketconsumers. Pv2: The sacrifice components of perceived value include monetaryprices and nonmonetaryprices. Consumers sacrifice both money and other resources (e.g., time, energy, effort) to obtain products and services. To some consumers, the monetarysacrifice is pivotal: some supermarketshoppers will invest hours clipping coupons, readingfood advertising in the newspaper, and traveling to different stores to obtain the best bargains. To these consumers, anything that reduces the monetarysacrifice will increase the perceived value of the product. Less price-conscious consumers will find value in store proximity,

ready-to-servefood products,and home delivery-even at the expense of higher costs-because time and effort are perceived as more costly. Evidence. Recent researchreveals that saving time has become a pivotal concern of consumers in supermarketshopping and cooking. Supermarketshoppers have cited fast checkout as more importantthan low prices in selecting grocery stores (Food MarketingInstitute 1985, 1986). Studies also show that consumers are willing to spend money to get more convenient packaging in food products(Morris 1985). Pv3: Extrinsic attributesserve as "value signals" and can substitute for active weighing of benefits and costs. How carefully do consumers evaluate these components of productsin making assessments of value? To judge from the product category of beverages, cognitive assessment is limited. Ratherthan carefully consideringprices and benefits, most respondentsdepended on cues-often extrinsic cues-in forming impressions of value. A few respondents carefully calculatedthe cheapest brandin their set on a regular basis, but most seemed to follow Langer's (1978) notion of mindlessness: most respondentsbought beverages with only minimal processing of available information.They repeatedlyboughta brandthey trusted or used extrinsic value cues to simplify their choice process. These value triggerswere presentregardlessof the way consumers defined value. Many consumers who defined value as low price reportedusing a coupon as a signal to low price without actually comparingthe reduced price of the couponed brand with the prices of other brands, or they reportedthat "cents-off" or "everyday low price" signs or a private label brand triggeredthe value perception. Respondentswho defined value in terms of what they wanted in products cited small containers, single-serving portions, and ready-to-serve containers. Consumers who defined value as the quality they get for the price they pay used signals such as 100% fruit juice on special or

brand name on special. Finally, consumers who defined value as what they get for what they pay depended on form (frozen vs. canned juice) and economy-sized packages as signals. Not all consumersrespondedin this mindless way -many saw their role as economical shopper to be importantenough to spend time and effort to weigh carefully the give and get components in their own equationsof value. Moreover, not all productsare as simple or inexpensive as beverages. One would expect to find more rational evaluation in situations of high informationavailability, processing ability, time availability, and involvement in purchase.

Evidence. To date, no reportedempirical studies have investigatedthe potentialof triggers that lead to perceptionsof value. Pv4: The perceptionof value depends on the frame of reference in which the consumer is making an evaluation. Holbrookand Corfman(1985) maintainthat value perceptions are situational and hinge on the context withinwhich an evaluativejudgmentoccurs. This view may help explain the diversity of meanings of value. In the beverage category, for example, the frame of reference used by the consumer in providing meanings includedpoint of purchase,preparation,and consumption.Value meantdifferentthingsat each of these points. At the point of purchase, value often meant low price, sale, or coupons. At the point of preparation, value often involved some calculation about whetherthe productwas easy to prepareand how much the consumercould obtain for what she paid. At consumption, value was judged in terms of whether the children would drink the beverage, whether some of the beverage was wasted, or whetherthe children appreciatedthe mother for buying the drinks. Evidence. No empirical studies have been conductedto investigatethe variationin value perceptions across evaluation contexts. Pv5: Perceived value affects the relationship between quality and purchase. As Olshavsky (1985) suggested, not all consumers want to buy the highest quality item in every category. Instead, quality appearsto be factored into the implicit or explicit valuation of a product by many consumers (Dodds and Monroe 1985; Sawyer and Dickson 1984). A given productmay be high quality, but if the consumer does not have enough money to buy it (or does not want to spend the amount required), its value will not be perceived as being as high as that of a productwith lower qualitybut a more affordableprice. In other words, when geta - givea > getb - giveb but the shopper has a budget con-

straint, then givea > budget constraints > giveb and hence b is chosen. The same logic may apply to products that need more preparationtime thanthe consumer's time constraintallows. The respondentsin the beverage study illustrated this point as they discussed their typical purchasing behavior. For respondentswith several children, beverages accounted for a large portion of their weekly food bill. Though most believed that pure fruit juice was of higher quality than fruit drinks, many of these respondentsdid not buy only pure fruitjuice because it was too expensive. They tended to buy some proportion of pure fruitjuice, then round out these more

Consumer of Price,Quality,andValue/ 15 Perceptions

expensive purchases with fruit drinks. In their evaluation,high qualitywas not worthits expense, so lower levels of quality were tolerated in a portion of the weekly beverages. These consumers obtained more value from the lower quality juices because the low costs compensatedfor the reductionin quality. Evidence. Several empirical studies have investigated the relationshipbetween quality and purchase, but no empirical studies have investigated explicitly the role of value as an interveningfactorbetweenquality andpurchase.However, studieson the use of unit price information(e.g., Aaker and Ford 1983; Dickson and Sawyer 1985; Zeithaml 1982) suggest that many consumers use unit price information(i.e., a measure of value) in making productchoices in supermarkets.

Research Implications The precedingpropositionsraise questionsabout ways in which quality and value have been studied in the past and suggest avenues for future research. Current Practices in Measuring Quality Academic research measuring quality has depended

heavily on unidimensional rating scales, allowing quality to be interpretedin any way the respondent chooses. This practice does not ensure that respondents are interpretingquality similarly or in the way the researcherintends. Hjorth-Anderson (1984) claims that unidimensional scales are methodologically invalid by showing that the concept of overall quality has many dimensions. Holbrookand Corfman(1985) call for ambiguous quality measures to be replaced with scales based on conceptualdefinitionsof quality. An example of the approachthey recommend is illustratedby Parasuraman, Zeithaml,and Berry (1985), who investigated service quality in an extensive exploratorystudy, conceptualizedit in dimensionsbased on that investigation, and operationalizedit using the conceptual domain specified in the first phase (Parasuraman,Zeithaml, and Berry 1986). In that stream of research, quality was defined as a comparisonbetween consumer expectations and perceptionsof performancebased on those dimensions,an approachthat allows for individualdifferences across subjectsin the attributesthat signal quality. The researchapproachused by Parasuraman,Zeithaml, and Berry (1985) could be used in different categories of products (e.g., packaged goods, industrial products, durablegoods) to find the abstractdimensionsthat capturequalityin those categories.Such an attemptis currentlyunderwayby Brucksand Zeithmal (1987) for durablegoods. Studies also are needed to determinewhich attributessignal these dimensions, when and why they are selected instead of other cues,

16 / Journalof Marketing, July1988

and how they are perceived and combined (see also Gutmanand Alden 1985, Olson 1977, and Olson and Jacoby 1972 for similar expressions of needed research). Finally, the relationship between the constructsof attitudeand qualityshouldbe examined.The instrumentalityof a productfeature(Lewin 1936) and the quality rating of such a feature in separately determiningchoice may be an interestingresearchissue. The convergent and discriminantvalidity of the constructs of attitudeand quality also warrantinvestigation. Quality measurementscales remain to be developed and validated. Current Practices in Modeling Consumer Decision Making Three aspects of modeling consumerdecision making can be questioned if the propositionsprove to be accurate representations:the tendency to use actual attributesof productsratherthan consumerperceptions of those attributes, the practice of duplicating and comingling physical attributeswith higher order attributes(Myers and Shocker 1981), and the failure to distinguish between the give and get (Ahtola 1984) components of the model. Howard(1977, p. 28) clearly states the first problem. It is essentialto distinguishbetweenthe attributesper se andconsumers'perceptionsof these attributes,because consumersdiffer in theirperceptions.It is the perceptionthat affects behavior,not the attributeitself. "Attribute"is often used to mean choice criteria, but this leads to confusion. To use "attribute" when you mean not the attributeitself but the consumer'smentalimage of it, is to reify whatis in the consumer'smind. Jacoby and Olson (1985) concur, claiming that the fo-

cus of marketersshould not be objective reality but instead consumer perceptions, which may be altered either by changing objective reality or by reinterpreting objective reality for consumers. Myers and Shocker (1981) point out that comingling quality, a higher level abstraction, with lower level physical attributes in models limits the validity and confounds the interpretation of many studies, especially when this practice duplicates lower level attributes. Therefore, it is necessary to use attributesfrom the same general classification or level in the hierarchy in modeling consumer decision making. Ahtola (1984) confirms that when the hierarchical nature of attributes is not recognized in consumer decision

models, double and triple counting of the impact of

some attributes results. Techniques to elicit and or-

ganize attributes,in his opinion, should precede modeling of the attributes.Myers and Shocker (1981) discuss different consumer decision models appropriate for the levels and ways attributesshould be presented in researchinstrumentsand analyzed later. Huberand

McCann(1982) reveal the impactof inferentialbeliefs on product evaluations and acknowledge that understandingconsumer inferences is essential both in getting informationfrom consumers and in giving information to consumers. Finally, Ahtola (1984) calls for expandingand revising models to incorporatethe sacrifice aspects of price. Sacrifice should not be limited to monetaryprice alone, especially in situationswhere time costs, search costs, and convenience costs are salient to the consumer.

Methods Appropriate for Studying Quality and Value The approachused in the exploratoryinvestigation is appropriatefor investigating quality in other product categories. Olson and Reynolds (1983) developed methods to aggregate the qualitative data from individual consumers. Aggregate cognitive mapping, structuralanalysis, cognitive differentiationanalysis, and value structuremapping are all techniques designed especially to analyze and representhigher order abstractionssuch as quality. These techniquesare more appropriatethan preference mapping or multiattribute modeling for investigating concepts like quality and value (for a complete discussion and explication of these techniques, see Gutmanand Alden 1985 or Reynolds and Jamieson 1985). Several researchershave developed approachesto link product attributesto perceptions of higher level abstractions.Mehrotraand Palmer (1985) suggest a methodological approachto relating product features to perceptionsof quality based on the work of Olson and Reynolds (1983). In their procedure,lists of cues and benefits are developed from focus groups or indepth interviews with consumers, semantic differential scales are constructed to capture the benefits, a tradeoff procedure is used to determine the importance of the cues, and respondents match cues to productconcepts. Through this type of analysis, degree of linkage (between cues and benefits), value of a cue, and competitive brand information are provided. Mazursky and Jacoby (1985) also recognized the need for proceduresto trackthe inferenceprocessfrom considerationof objective cues to the higher level image of quality. Instead of free-elicitationprocedures, they used a behavioralprocessing simulationwhereby they presentedattributeinformationto respondentsand asked them to form an impressionof qualityby choosing any informationthey wished. Though this method can be criticizedas unrealistic,it providesinsightsinto the types of informationthat consumersbelieve signal quality. Modifications of the method to make the environmentmore realistic (such as by Brucks 1985) are also possible. Other researchershave described analytic proce-

dures to link attributes with perceptions. Holbrook (1981) provides a theoreticalframeworkand analytic procedurefor representingthe interveningrole of perceptions in evaluative judgments. Neslin (1981) describes the superiorityof statisticallyrevealed importance weights over self-stated importanceweights in linking productfeatures to perceptions. Researching Value A major difficulty in researchingvalue is the variety of meanings of value held by consumers. Building a model of value requiresthat the researcherunderstand which of many (at least of four) meanings are implicit in consumers'expressionsof value. Utility models are rich in terms of methodological refinements (see Schmalensee and Thisse 1985 for a discussion of different utility measures and equations), but do not address the distinctionbetweenattributesand higherlevel abstractions.They also presumethat consumerscarefully calculate the give and get componentsof value, an assumption that did not hold true for most consumers in the exploratorystudy.

Price as a Quality Indicator Most experimentalstudies related to quality have focused on price as the key extrinsic quality signal. As suggested in the propositions,price is but one of several potentially useful extrinsic cues; brand name or packagemay be equally or more important,especially in packagedgoods. Further,evidence of a generalized price-perceived quality relationshipis inconclusive. Quality researchmay benefit from a de-emphasis on price as the main extrinsic quality indicator.Inclusion of other importantindicators,as well as identification of situations in which each of those indicatorsis important,may provide more interestingand useful answers about the extrinsic signals consumers use.

Management Implications An understandingof what quality and value mean to consumersoffers the promise of improvingbrandpositions throughmore precise marketanalysis and segmentation, productplanning, promotion, and pricing strategy. The model presentedhere suggests the following strategies that can be implemented to understand and capitalize on brandquality and value.

Close the Quality Perception Gap Though managers increasingly acknowledge the importanceof quality, many continueto define and measure it from the company's perspective. Closing the gap between objective and perceived quality requires that the company view quality the way the consumer does. Research that investigates which cues are importantand how consumersform impressionsof qual-

Consumer of Price,Quality, andValue Perceptions / 17

ity based on those technical, objective cues is necessary. Companies also may benefit from research that identifies the abstract dimensions of quality desired by consumers in a product class.

may be able to educate consumers on ways to evaluate quality. Advertising, the information provided in packaging, and visible cues associated with products can be managed to evoke desired quality perceptions.

Identify Key Intrinsic and Extrinsic Attribute Signals A top priority for marketers is finding which of the many extrinsic and intrinsic cues consumers use to signal quality. This process involves a careful look at situational factors surrounding the purchase and use of the product. Does quality vary greatly among products in the category? Is quality difficult to evaluate? Do consumers have enough information about intrinsic attributes before purchase, or do they depend on simpler extrinsic cues until after their first purchase? What cues are provided by competitors? Identifying the important quality signals from the consumer's viewpoint, then communicating those signals rather than generalities, is likely to lead to more vivid perceptions of quality. Linking lower level attributes with their higher level abstractions locates the "driving force" and "leverage point" for advertising strategy (Olson and Reynolds 1983).

Understand How Consumers Encode Monetary and Nonmonetary Prices The model proposes a gap between actual and perceived price, making it important to understand how consumers encode prices of products. Nonmonetary costs-such as time and effort-must be acknowledged. Many consumers, especially the 50 million working women in the U.S. today, consider time an important commodity. Anything that can be built into products to reduce time, effort, and search costs can reduce perceived sacrifice and thereby increase perceptions of value.

the Dynamic Nature of Quality Acknowledge Perceptions Consumers' perceptions of quality change over time as a result of added information, increased competition in a product category, and changing expectations. The dynamic nature of quality suggests that marketers must track perceptions over time and align product and promotion strategies with these changing views. Because products and perceptions change, marketers

Recognize Multiple Ways to Add Value Finally, the model delineates several strategies for adding value in products and services. Each of the boxes feeding into perceived value provides an avenue for increasing value perceptions. Reducing monetary and nonmonetary costs, decreasing perceptions of sacrifice, adding salient intrinsic attributes, evoking perceptions of relevant high level abstractions, and using extrinsic cues to signal value are all possible strategies that companies can use to affect value perceptions. The selection of a strategy for a particular product or market segment depends on its customers' definition of value. Strategies based on customer value standards and perceptions will channel resources more effectively and will meet customer expectations better than those based only on company standards.

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and Leonard Berry (1987), "The Time Consciousness of SupermarketShoppers," working paper, Texas A&M University.

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